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How lending and borrowing take place in Decentralized Finance (DeFi) ?

As associations began exploring different avenues regarding the potential of  Blockchain technology, the financial area has additionally introduced the need to assemble blockchain-based fintech applications. By covering practically every financial service from online installments to cryptocurrency trading and its storage, Blockchain is set to change the conventional finance system. With the rise of DeFi (Decentralized Finance), Blockchain has become more assertive.

With loads of enthusiasm yielded effectively in the market, DeFi has continued thriving ahead and drawn in a significant capital sum since 2020. As indicated by DeFi-Pulse, the Total Value Locked (TVL) in DeFi programs is at $20.46 billion today, up from under 1 billion dollars a year ago.

Let’s look into what makes Decentralized finance and Defi lending such a significant hit. This article discusses each of the DeFi related concerns in detail.

Table of content

  • What is DeFi?
  • What is DeFi lending and borrowing?
  • How does DeFi lending work?
  • Benefits that Defi Lending offers to its users.
  • Improved speed of loan procedure.
  • Greater consistency in lending decisions.
  • Compliance with local, state, and federal regulations.
  • Permissionless
  • Transparency
  • Interoperability
  • Self-custody
  • Closing thoughts

What is DeFi?

In most simple words, DeFi is an environment of financial applications dependent on Blockchain technology that works without central administration intercession or third-party involvement. It utilizes a P2P system to build decentralized applications that would empower everybody to interface and deal with their assets regardless of their location and status. It intends to give a transparent, open-source,  and permissionless financial help setting. 

Smart contracts are the base for decentralized finance (DeFi) as they are self-executing and don’t need intermediary supervision. Since Ethereum launched the DeFi concept, the more significant part of the DeFi applications is Ethereum Blockchain.

What are DeFi lending and borrowing?

DeFi lending platforms offer crypto lendings in a trustless way, i.e., without delegates and permit users to enroll their crypto coins on the platform for lending. A borrower can take a loan by using a decentralized platform called P2P lending. Moreover, the lending practice permits the lender to gain interests. DeFi has the highest lending growth rate and is the most predominant patron for locking crypto assets among all decentralized applications (DApps).

How does DeFi lending work?

DeFi loans allow clients to loan their crypto to another person and acquire interest on the loan. Banks consistently have been using this system to the fullest. Presently, in the realm of DeFi, anybody can turn into a lender. A loan provider can loan their assets to other people and will gain interest on that loan. This process can be made possible through lending pools.

Clients can pool their assets and disseminate them to borrowers utilizing smart contracts. There are different approaches to disperse interests to financial investors; subsequently, it is recommended and worth taking out time to research to learn about your interest type. It is similar for borrowers, too, as each pool will carry a different methodology on the best way to borrow.

To get a loan, the borrower needs to offer something more important than the loan sum. Smart contracts are utilized to store this amount of currency of equivalent value to the sum of the loan. Collaterals are accessible in wide assortments; any crypto token can be used to trade borrowed cryptocurrency. For instance, if a client needs to get one bitcoin, he’d need to store the cost of one bitcoin in DAI.

Moreover, the costs of Bitcoins continue to swing remarkably. A case may emerge when the collateral cost dips under the cost of the loan. 

What are the benefits that DeFi Lending provides to its users?

  • Improved speed of loan procedure

Digital lending measures acquire the benefit of quick processing speed. DeFi lending platforms are supported by cloud-based assistance, analytics for fraud detection, and AI computations for ideal loan terms and risk factors. Every one of these advances helps to speed up the process. When the loan is validated, lenders send offers through e-contracts.

  • Greater consistency in lending decisions

Consistency in lending decisions is ensured by the rules clarifying credit policies. Differences in analyzing applicant details and structuring contracts by underwriters are removed.

  • Compliance with local, state, and federal regulations

Decision rules keep a report of who, when, and where these rules were employed and which of them were in effect. This acts as evidence and guarantees that the lender complies with local, state, and federal regulations.

  • Permissionless

DeFi lending enables permissionless access. This means any person with a crypto wallet has access to DeFi applications created on Blockchain, regardless of their location and without any requirements of the minimum amount of funds.

  • Transparency

The public Blockchain reports each transaction on the system and is analyzed by each user on the blockchain network. This transparency level regarding transactions authorizes productive data analysis and guarantees verified access to each user on the system.

  • Interoperability

The interconnected software stack guarantees that decentralized finance procedures and applications blend and fill out one another.

  • Self-custody

The application of Web3 wallets allows  Defi market participants to maintain strong custody over their assets and regulate their data.

Closing Thoughts

This thorough discussion exhibits that DeFi lending has an impressive capacity to reshape the whole financial system. It strives to decentralize the foundation of traditional finance services. DeFi lending, along with the captivating technology, truly can revolutionize the global economic landscape.

Get yourself enrolled for the best blockchain courses and learn blockchain technology in detail at BLOCKCHAIN COUNCIL.

How lending and borrowing take place in Decentralized Finance (DeFi) ?

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Blockchain in Telecom Explained

Wondering why telecom companies are adopting Blockchain technology? What are its use-cases in the telecom domain? This article has got you covered.

Table of Contents

  • Definition of Blockchain
  • Why Discussing Blockchain in a Telecoms Context is Crucial?
  • Blockchain Use-Cases in Telecommunications 
  • Concluding Lines: What is Achieved and What can be Achieved Further?

Definition of Blockchain

In most simple words, Blockchain is a Peer-to-Peer(P2P), decentralized, public ledger that records online transactions and works without involving any third-party.

It records all the transactions that have taken place in a secure and immutable way, thus ensuring security and privacy. Blockchain technology has become popular because of its ability to offer decentralization, reliability, and security. Apart from this, Blockchain does not take a lengthy process for verification, agreement, and approval.

Want to gain an in-depth understanding of Blockchain and become a Certified Blockchain Developer? Get started today with Blockchain Council.

Why Discussing Blockchain in a Telecoms Context is Crucial?

Blockchain, which started as a peer-to-peer version of electronic cash, has the potential to revamp and reconstruct almost every industry, including supply chain, finance, healthcare, logistics, telecom, among others. Technology has captured the popular imagination due to its ability to provide complete transparency, immutability, privacy, and security. When it comes to the telecom industry, there are various challenges. 

Despite the fact that the telecommunication sector has changed a lot over the last 20 years, still, both providers and subscribers struggle with roaming, high fees, risk of fraud, privacy issues, and so much more. When it comes to inter-carrier transactions, they rely on a mix of automated and manual systems that make the method of doing business together complicated, delayed, and expensive. 

Blockchain Use-Cases in Telecommunications 

Blockchain is arising as a revolutionary technology to manage all the existing issues in the telecom industry, thus opening a new era in terms of efficiency, transparency, and security. Due to its potential to enable full automation in financial settlement and fraud prevention to KYC procedures for onboarding customers, this technology is transforming telecom for good. Let’s explore some of its use-cases in the telecom industry.

  • Roaming and Settlements

As we already mentioned, roaming is one of the major issues because intermediaries are involved in controlling roaming partner settlements, which takes around two months to get resolved. This process further leads to manual errors, frauds, lack of transparency, and other issues.

This complex process can be automated by using smart contracts functionality. Smart Contracts on the Blockchain network can ensure the settlement between the participating members by eliminating third-party intermediaries and automating the SLA agreements through tamper-proof verifiable transactions and real-time updates to the end-users.

  • Identity Management and Fraud Prevention

Identity Management and fraud prevention in the telecom industry is another crucial aspect because multiple third-party agents handle the submission of identity documents; thus, the chances of misuse and leakages are more. Blockchain can address such issues by offering decentralized storage with control remaining entirely in the hands of document owners. Its immutable nature will not only help reduce forgery but also control the submission of fraudulent documents. 

In the telecom industry, the large instances of databases and storage can be replaced with distributed ledgers, thus eliminating various issues.

  • Mobile Number Portability (MNP)

If you have ever gone through the MNP process, you must have realized that it’s a long, time-consuming process. The reason for high processing time is essentially due to data mismatch between operators and periodic updation required from the central database.

Blockchain can streamline this entire complex process by providing a single source of truth where all service providers can review and action requests for Mobile Number Portability. The distributed ledger will help eradicate single-point failure, as all service providers have access to the shared data. Thus instead of days, MNP can be achieved almost instantaneously.

Concluding Lines: What is Achieved and What can be Achieved Further?

Due to Blockchain’s potential, various telecom industries, including Airtel, AT&T, Vodafone, among others, are utilizing this technology to enhance their services. For instance, Telefonica has collaborated with IBM and uses the IBM platform to log information collected by various networks when routing international calls in order to improve the reliability and transparency of collected information. Similarly, Vodafone, a global telecom giant, leverages Blockchain to bring clarity and efficiency to transformed processes. Moreover, other well-known telecom industries are using Blockchain to enable micropayments for music, mobile games, and other value-added services. 

Thus from the above discussion, we can conclude that this distributed ledger technology is taking the entire world into the future, and despite this, there is so much room for exploring and discovering new opportunities.

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council. 

Blockchain in Telecom Explained

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How Blockchain and Sound-Based Technology Protect Digital Payment Systems

How Blockchain and Sound-Based Technology Protect Digital Payment Systems

Wondering what role does Blockchain and other related technologies play in protecting digital payment systems. You have landed on the right page. This article talks about the rise of digital payments, associated risks, and how Blockchain and sound-based technology protect digital payments.

Table of Contents 

  • Digital Payments on the Rise
  • What are the Associated Risks?
  • Blockchain and Sound-based Technology: A Smart Combination of Technologies
  • Concluding Lines 

Digital Payments on the Rise

Digital payments and UPI have played a crucial role in the development of e-commerce in developed as well as developing countries like India. Even before the pandemic that took millions of lives worldwide, individuals and companies were using digital apps to monitor their budgets and perform transactions. But amid the COVID-19 outbreak, UPI transactions nearly doubled between the month of April and September 2020, hitting a volume of more than 180 crores, according to the National Payments Corporation of India (NPCI). Experts and technocrats believe that digital payments such as cryptocurrencies have the potential to accelerate financial inclusion and open gateways to new forms of investing. Over the projected period of 2021 to 2026, the Digital Payments Market is predicted to expand at a CAGR of 13.7 percent. 

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What are the Associated Risks?

The digital transaction market is gaining traction and expanding at an unprecedented pace, which is positive news for the economy as more people are accepting this approach alongside the traditional one.

But undoubtedly, there are challenges associated with digital payments that need to be addressed. Let’s delve deeper and explore. 

The growth in digital payments has coincided with a dramatic increase in digital payment fraud. During the pandemic, there was a spike in the number of fake phone calls and SMS, as well as illegal SIM copying, vishing threats, and cashback/refund scams.

Although digital payments are inspired by technology innovations, they are still prone to threats and cyber-attacks. People with malicious motivations find ways to trick people by sending links or producing a dummy app that consumers are unable to comprehend and hence fall prey to certain assaults. During a pandemic, the ‘Request Money’ scam became one of the most popular fraud tales. 

As a result, it is becoming increasingly important for businesses and private actors to collaborate in order to provide the appropriate strategies to defend consumers in an increasingly sophisticated threat environment.

Internet penetration, illiteracy, lack of trust are some of the other issues related to digital payments. 

Blockchain and Sound-based Technology: A Smart Combination of Technologies

Although various technologies and security protocols are emerging to fend off malicious actors, this has, however, not prevented fraud from taking place. Moreover, the two-step authentication mechanism can become a cause of trouble where digital or internet penetration level is far from optimal. 

Blockchain professionals and technocrats believe that a combination of peer-to-peer, decentralized distributed ledger technology, Blockchain, and soundwave technologies can be the key to solving the problem. 

If you are a beginner to Blockchain, please note that it is a P2P decentralized distributed ledger technology that maintains the history of records in an immutable manner.  

Since the technology keeps a record of every transaction in millions of separate blocks, therefore even if one block suffers an attack, the information contained in the rest of the blocks will stay secure and intact. Thus, when it comes to hacking a Blockchain system, the threat actors would require to leverage tremendous computing power to compromise millions of nodes(blocks) at the same time. In fact, hacking a Blockchain is almost close to impossible. 

As a result, this technology emerges as an optimal method for securely storing all transaction-related data.

Does that mean that it is 100% secured? No, it is not. As nothing is 100% secure, therefore, Blockchain can suffer from crypto key tampering, lack of Blockchain integrity and security plans, inappropriate consensus mechanism, lack of malicious code protection, misused timestamps, and other issues.

Now, coming to sound-based technology, the biggest benefit of using this technology is that it is hardware-independent. Users often don’t require mobile devices or internet connections to make digital payments using this technology because it allows for smooth contactless payments by sound.

The fusion of Blockchain and soundwave technology is ideal for allowing safer, transparent, and contactless payments.

Are you a beginner but want to get started as a Blockchain Developer? Check out Blockchain Council now! 

Concluding Lines 

The advent of digital-based payments such as cryptocurrencies and others has presented enterprises and even individuals with a tremendous opportunity to expand and lead. A lot of big players have entered the crypto space and are eyeing to grow exponentially as it brings transparency, faster cross-border settlements, and lowers operational costs.

Curious to learn more about cryptocurrencies and Blockchain technology. Get enrolled and become a Certified Blockchain Expert today!

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council. 

How Blockchain and Sound-Based Technology Protect Digital Payment Systems

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Why integrating Blockchain and ERP is a Great Idea

The ERP software centralizes all business data, empowering businesses to fully control the inner processes and make informed choices for the future. In addition, all data is updated in real-time, which is crucial for the smooth functioning of all industry sectors. Constant communication between functions reduces the chance of severe errors, while immediate access makes identifying potential setbacks in the ongoing processes. They create an ERP system to integrate with blockchain. Hence, companies have everything they demand, setting the perfect stipulations for business growth. Blockchain promotes the existing privileges of ERP system to a different level. These centralized business methods become accessible across multiple industries.

Trusted source

The integration enabled the optimization of all operations of several different companies and trusted data-sharing, which is particularly beneficial if we have financial transactions. Financial institutions and banks can enjoy more control over internal data operations, giving them a solid security grip. Financial organizations handle sensitive info with blockchain – they are sure to provide services with the least risk.

Database optimization

ERP’s optimizes database administration framework; blockchain employs a real-time scalable database that supports verification of purposes, stages and applications.

Theoretically, Blockchain and ERP have a significant portion in common. ERP runs on a system of a single modification of data. Blockchain also controls a single table of data which is shared by millions of buyers on the web.

The information is available to each member node in the blockchain, yet none can alter or change the report without any agreement. This feature of the distributed ledger variation is the most critical point in integrating ERP with Blockchain. Such type of coordination can be effective in building up trust between various organizations.

Let us check out some of the advantages of integrating ERP systems into a blockchain.

Speeds up the processes

The creation of intelligent contracts presents testimony to the equivalent. After integrating blockchain with the ERP system, it’s easier to optimize internal data control, business process flow, and company-wide transactions. Blockchain shares stable data, stores all the activities between stakeholders — companies, vendors, and suppliers.

Transparent transaction

Blockchain has changed how intercompany transfer takes place within the parent company with its subsidiaries. Nearly half of industry leaders will adopt blockchain as the primary intercompany transaction management. Blockchain is also offering supply chain actions more transparency.

Facilitates risk-free payment procedure

Blockchain soothes payment transactions and assures the risk-free and automated. It provides a p2p transaction facility that supports the trade of financial resources in a risk-free atmosphere. Since it functions on a decentralized model, hackers find it difficult to penetrate the system and steal the money. Furthermore, blockchain also ensures that every transaction is submissive to laws.

Secures data records

Blockchain helps to track the user who performs any change in it. Also, it confirms authorized personnel by using digital signatures based on public-key cryptography and holds the secret key to determine the owner. When integrated with an ERP system, businesses function ideally and earn higher profits in the long run.

Why integrating Blockchain and ERP is a Great Idea

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Blockchain Versions Explained: A Guide for Beginners

Blockchain Versions Explained A Guide for Beginners

Are you a beginner in the Blockchain space? Want to get started with this futuristic technology? This article talks about various versions of Blockchain, providing a clear understanding of exactly what this technology is all about.

Table of Contents

  • What Exactly is Blockchain Technology?
  • Types of Blockchain Versions
            * Version 1.0: Cryptocurrency
            * Version 2.0: Smart Contracts
            * Version 3.0: Introduction to dApps
            * Version 4.0: Blockchain for Industry
  •   Wrapping Up 

What Exactly is Blockchain Technology?

A Blockchain is a peer-to-peer (P2P), decentralized, distributed ledger technology with a continually growing public ledger that keeps a permanent record of all the transactions securely and immutably. A blockchain is a network of information-containing blocks where each block tracks all recent transactions and, once done; it is stored permanently on a Blockchain network.

It is different from the traditional database because Blockchain is decentralized because there is no intermediary or mediator, and it is fully confidential. 

The technology has gained a lot of public attention since 2009, and since then, it is continually growing and developing, and now it is more than bitcoins and cryptocurrency. Its demand is because of its ability to offer decentralization, immutability, transparency, and privacy.

Are you a beginner in this domain? Want to get started with Blockchain and become a Certified Blockchain Expert? Get started today!

Types of Blockchain Versions 

As we have understood what exactly Blockchain is, let’s delve deep into the evolution of this technology, including blockchain progression from version 1.0 to version 4.0.

  • Version 1.0: Cryptocurrency 

The implementation of distributed ledger technology led to its first-ever application, and that was the introduction of cryptocurrency, Bitcoin. After Bitcoin, various other cryptocurrencies were introduced to allow financial transactions based on Blockchain. 

Satoshi Nakamoto, a pseudonym for a different person or persons who invented Bitcoin, wanted to create a “trust-less” cash system by removing third-party intermediaries, unlike in traditional systems that require mediators to perform digital monetary transfers.

  • Version 2.0: Smart Contracts

After Bitcoin, version 2.0 extends the concept of Bitcoin beyond cryptocurrency. 

There were several challenges that came with Bitcoin, and those were wasteful mining and lack of network scalability. To deal with such issues, version 2.0 introduced smart contracts. Smart Contracts are autonomous computer programs that execute automatically when the desired conditions are satisfied. Such contracts run on the blockchain network without any plausibility of downtime, fraud, or error.

The aim of the smart contract is to provide security while processing transactions and reduce excess transaction costs and time. Unlike traditional contracts, smart contracts maintain complete transactional transparency, offer security and confidentiality by making use of cryptographic algorithms. 

Smart contracts can be applied to trade finance, supply chain, property ownership, and many other domains. 

  • Version 3.0: Introduction to dApps

dApps are Blockchain-based apps, or we can say that dApps are a part of the software that communicates with the Blockchain, which manages and controls the state of all network actors. Unlike centralized apps that run on a single computer, blockchain-based apps run on a P2P network.

Such applications use decentralized storage and communication, and most have their backend code running on a decentralized network, unlike centralized applications that run on centralized servers. 

A few of the top-ranked dApps are ForkDelta, CryptoKitties, Bancor, Ether Shrimp Farm, PoWH 3D, Moon, Inc., among others. 

  • Version 4.0: Blockchain for Industry

Although the value of Blockchain in industries is yet to be defined, there are still some areas such as finance, supply chain, manufacturing, healthcare, logistics, including others in which this technology provides prospective benefits. Technology 4.0 demonstrates the strategies that make Blockchain available to business requirements.

Various organizations, industries, enterprises, and businesses are willing to adopt Blockchain technology for their efficient operations. Due to their decentralized nature, distributed ledger technologies like Blockchain can easily resist malicious attacks and frauds. With continuous efforts, Blockchain developers and technocrats are trying to build a scalable, adaptable, and affordable Blockchain for the world. 

Wrapping Up 

Undoubtedly, Blockchain has made a lot of progress since its invention. Those who have understood its potential are ready to go beyond the paradigm of a central system for anything and everything. Due to its decentralized nature, technology can easily resist malicious attacks and can execute transactions instantly. The latest upgraded version that is version 4.0 is leading us towards faster processing and sustainable technology in terms of immutability, anonymity, privacy, secure transactions, and cost-efficiency. But still, there is a call for a safer and more robust Blockchain.

If you are a beginner but want to master this futuristic technology, Blockchain Council is here to assist you!

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council. 

Blockchain Versions Explained: A Guide for Beginners

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